Pritzker admin hires firm to verify Exelon’s nuke hardship claims

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It’s tasked with auditing the company’s plants, assessing costs and revenues given now and projecting over the next five years, according to the emergency purchase statement. Among the qualifications the Pritzker administration specified for the role was that the firm chosen could not have done work for Exelon in the past. That disqualified a fair number of bidders.

The move comes as Exelon for the second time in four years has said it would shutter nukes in Illinois unless they’re subsidized by the state. In August, the company announced it would close the Dresden and Byron reactors this coming fall without government action.

Gov. J.B. Pritzker and lawmakers will have to decide this spring what, if anything, to do to keep those plants open. Exelon’s nukes are responsible for more than half the electricity generated in the state and are valuable due to their carbon-free emissions. In addition, they support thousands of well-paid union jobs and are critical sources of tax revenue in the localities that host them.

Pritzker wants passage of comprehensive energy legislation to put Illinois on a course for a carbon-free power industry. Exelon frequently has emphasized that the state’s environmental goals will be extraordinarily difficult to realize if nuclear plants are retired before their useful lives are up.

“With Exelon’s (closure) announcement . . . the state has concerns that the generation gap will be filled by dirty energy, namely fossil fuels,” according to the purchase statement. “In order to advance the state’s clean energy goals, IEPA and the governor’s office are assessing how and over what period of time to meet clean energy targets, which requires understanding the schedule of statewide plant closures, including Exelon’s plants.”

The profitability of Exelon’s Illinois fleet as a whole, as well as individual plants, has been a source of confusion, with the company using terminology like “revenue shortfalls” to describe financial stress. In the past, Exelon has referred to its failure to earn specified profits above its costs as the kind of hardship necessitating plant closures.

"As we have said from the beginning, Exelon will open its financial records to any policymaker who wants to better understand the challenges facing our zero-carbon nuclear plants in Illinois," a spokesman said in an email. "We look forward to cooperating with the governor and the consultants his administration engages to better inform decisions about critical state energy and environmental policies."

In 2016, the state agreed to subsidize two other nukes Exelon threatened to close as part of the Future Energy Jobs Act, signed into law by Pritzker’s predecessor Gov. Bruce Rauner. Ratepayers statewide are paying more than $2 per month on their electric bills just to funnel the $235 million in cash Exelon gets each year via that statute.

Back then, Exelon, along with its Commonwealth Edison subsidiary, were arguably the most politically powerful business interests in Illinois. That certainly isn’t true anymore following ComEd’s July admission that it engaged in a nine-year bribery scheme to win the favor of House Speaker Michael Madigan, featuring no-work contracts to his close allies and even a board seat given to an individual at his repeated request.

Pritzker has insisted that ComEd and Exelon, along with other utilities, “won’t write” the energy bill. Exelon’s threats have made that job far more difficult, putting Pritzker in a quandary where his green ambitions will be difficult to achieve without another provision that can be construed by a corporate bailout.

Once Synapse reports, Pritzker and lawmakers will have just two months to decide what to do given Exelon’s closure timetable.

via Crain’s Chicago Business

January 11, 2021 at 08:14PM

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